available free to registered BO

Transcription

1 ANNUAL REPORT 2016

2 y available free to registered BO

3 Table of Contents 01 MISSION & VISION CDBL OVERVIEW BOARD OF DIRECTORS OPERATIONAL HIGHLIGHTS FINANCIAL HIGHLIGHTS CDBL TEAM FIFTEENTH ANNUAL GENERAL MEETING EXTRA-ORDINARY GENERAL MEETING CDBL ALBUM DIRECTORS REPORT 13 Market Overview Central Depository System (CDS) Operations Personnel Financial Results Dividend Appropriations Contribution to the National Exchequer Outlook Changes in Directorship Election of Directors Appointment of Auditors Conclusion 11 AUDITORS REPORT STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CHANGES IN EQUITY 15 STATEMENT NOTES TO THE OF FINANCIAL CASH FLOWS STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

4 MISSION Mission of Central Depository Bangladesh Limited (CDBL) is to have a sound management team with carefully-chosen, highly-motivated staff fostering a spirit of enthusiasm balanced with prudent policies to achieve a high level of sophistication and expertise in the performance of its personnel by consistently striving to provide high quality services that are reliable, transparent and efficient by: i) Emphasizing the importance of the customer, ii) Unleashing employee initiative by empowering them, iii) Viewing activities of the business as processes and the goal of continuous improvement. Management s leadership endeavour is to forge a passionate, inspired, motivated and cohesive team to operate from a fully common bottom line, sharing the same agenda, driven by the same vision to achieve the best possible results, not only for the shareholders and the employees but also to boost public confidence in CDBL s growing strength as an independent, professionally managed institution. VISION Vision of Central Depository Bangladesh Limited (CDBL) is to be a dynamic, forward looking institution committed to adding value to the business of its clients. It will be equipped with up-to-date Information Technology to ensure prompt customer response and provide innovative solutions to the needs of the capital market playing a pivotal role in Bangladesh s financial services sector. 01

5 CDBL Overview Central Depository Bangladesh Limited (CDBL) is engaged in the operations of the Central Depository System (CDS), a major financial market infrastructure in Bangladesh established as a part and parcel of the overall financial sector reforms initiative spearheaded by the Ministry of Finance. CDBL was incorporated on 20 th August 2000 sponsored by the country's Nationalized Commercial Banks (NCBs), Investment Corporation of Bangladesh (ICB), Private Commercial Banks (PCBs), Foreign Banks, Merchant Banks, Publicly Listed Companies, Insurance Companies and Dhaka & Chittagong Stock Exchanges with the collaboration of the Asian Development Bank (ADB). The Company received registration from the Bangladesh Securities and Exchange Commission (BSEC) on 11 th September 2001 under Depository Regulations 2000 and subsequently obtained business commencement certificate on 23 rd December 2003 from the BSEC. The main objective of the Company is to assist listed companies in the handling of scriptless delivery, settlement and transfer of ownership of securities through computerized book entry system. Legal basis for CDBL s operations is set out in the Depository Act, 1999; Depository Regulations, 2000; Depository (User) Regulations, 2003 and the CDBL Bye Laws. CDBL s core services cover the efficient delivery, settlement and transfer of securities through computerized book entry system i.e. recording and maintaining securities accounts and registering transfer of securities; changing the ownership without any physical movement or endorsement of certificates and execution of transfer instruments. The Central Depository System (CDS) operated by CDBL has proved to be a convenient and reliable means to settle securities transaction. The investor has been freed from the hassles of physical handling of certificates, errors in paper work and the risks associated with damaged, lost and forged certificates. CDBL eliminated the risks and problems caused by the cumbersome process of physical transaction of shares at Dhaka and Chittagong stock exchanges by Electronic Book Entry Transfers. CDBL s operations are carried out in its Main Data Centre at BDBL Bhaban, Kawran Bazar, Dhaka which is linked to a remote Disaster Recovery Centre at BGIC Tower, Topkhana, Dhaka operating as a backup with data update taking place simultaneously. Live operations of the CDS commenced with the inauguration of the Electronic Government Securities Registry (EGSR) by the Governor of Bangladesh Bank on 20 th October Equity market securities dematerialization process i.e. eliminating physical certificate as record of security ownership by electronic book entry record in the CDS commenced on 24 th January 2004 with the entry of Square Pharmaceuticals Limited into the CDS. CDBL s Software application VeDAS (Versatile engine for Depository Accounting System) is built on three-tier architecture with Visual Basic at the Front End, TUXEDO as the middle tier transaction manager and Oracle at the Back End centralized database. Network connectivity to Depository Participants (DPs), Issuers, Banks, Stock Exchanges and Bangladesh Securities and Exchange Commission is through Front End interfaces accessed by fiber optics network connections. Small volumes of data transmission are also possible via PSTN telephone lines. CDBL is continuously enhancing its knowledge and capabilities in order to respond to any dynamic business environment to achieve better result. CDBL as a member of Asia Pacific Central Securities Depository (CSD) Group (ACG) hosted the 17 th ACG General Meeting in 2013 and 11 th ACG cross training seminar in 2009 at Dhaka. Since 14 th February 2003 CDBL has been acting as National Numbering Agency for International Securities Identification Number (ISIN) and Classification of Financial Instruments (CFI) in Bangladesh, initially as a partner and since 3 rd June 2010 as a full member of Association of National Numbering Agencies (ANNA). CDBL is also an associate member of South Asian Federation of Exchanges (SAFE). 02

6 BOARD OF DIRECTORS Mr. Sheikh Kabir Hossain Chairman Nominee of Bangladesh Insurance Association (BIA) Mr. A K M Nurul Fazal Bulbul Vice-Chairman Nominee of Bangladesh Association of Banks (BAB) 03 Mr. Syed Shahriyar Ahsan Director Nominee of Sadharan Bima Corporation Mr. Azam Jahangir Chowdhury Director Nominee of Prime Bank Limited Mr. Tapan Chowdhury Director Nominee of Square Pharmaceuticals Limited

7 Mr. Syed Manzur Elahi Director Nominee of Mutual Trust Bank Ltd Mr. Sajjad Hussain Director Nominee of AB Bank Limited Mr. Md. Obayed Ullah Al Masud Director Nominee of Nationalized Commercial Banks Dr. Muhammad Abdul Mazid Director Nominee of Chittagong Stock Exchange Limited (CSE) Justice Siddiqur Rahman Miah Director Nominee of Dhaka Stock Exchange Limited (DSE) Mr. Salman F. Rahman Director Nominee of Bangladesh Association of Publicly Listed Companies (BAPLC) Mr. AKM Shamsuddin Director Nominee of Standard Chartered Bank Mr. Md. Iftikhar-uz-zaman Director Nominee of Investment Corporation of Bangladesh (ICB) Mr. M H Samad, FCA, CTA Managing Director & CEO Central Depository Bangladesh Limited (CDBL) 04

8 Operational Highlights FINANCIAL YEARS ENDED 30 TH JUNE Depository elements Investors Accounts set up in the CDS 4,639,400 4,993,967 5,527,394 6,007,787 6,304,714 Investors Accounts in operable state in the CDS 2,686,783 2,645,335 2,958,353 3,195,852 3,155,585 Growth of operable Investors Accounts 0.3% -1.5% 12% 8% -1.3% Investors Accounts with Share Balances 1,831,176 1,755,454 1,689,246 1,591,518 1,531,492 Investors Accounts with Zero Balances 562, , ,021 1,120,233 1,185,360 Investors Accounts never used 292, , , , ,733 Depository Participants Growth of Depository Participants 5% 5% 4% 3% 2% Securities in the CDS - Issuers Growth of Issuers entry in the CDS 6% 5% 5% 7% 3% Number of Shares in the CDS (in millions) 31,829 36,877 44,408 50,874 54,948 Growth of Shares in the CDS 87% 16% 20% 15% 8% Market value of shares in the CDS (in Tk. billions) 1, , , , , % of stock exchange turnover settled in the CDS 100% 100% 100% 100% 100% 05

9 Investors Accounts at a Glance June ,733 1,185,360 1,531,492 3,155,585 June ,101 1,120,233 1,591,518 3,195,852 June , ,021 1,689,246 2,958,353 June , ,546 1,755,454 2,645, ,871 June ,736 1,831,176 2,686, ,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 Investors Accounts never used Investors Accounts with Share Balances Investors Accounts with Zero Balances Investors Accounts in operable state in the CDS Depository Participants (DPs) at a Glance Securities in the CDS - Issuers at a Glance June June June June June June June June June June

10 Financial Highlights FINANCIAL YEARS ENDED 30 TH JUNE Balance Sheet - Taka Paid-up Capital 2,000,000,000 2,000,000,000 2,000,000,000 2,000,000,000 2,000,000,000 Retained Earnings 629,987, ,465, ,058, ,801, ,788,130 Reserve: CDS up-gradation 200,000, ,000, ,000, ,000, ,000,000 Headquarter building 1,900,000,000 2,150,000,000 2,400,000,000 2,650,000,000 2,850,000,000 Investor Protection - 50,000, ,000, ,000, ,000,000 Shareholder s Equity 4,729,987,082 5,008,465,557 5,487,058,424 5,871,801,690 6,195,788,130 Total Liabilities 563,816, ,636, ,412, ,966, ,877,563 % Increase/(Decrease) (73.29) (3.40) (22.35) 1.27 Total Asset 5,293,803,567 5,553,101,783 6,182,471,197 6,411,767,877 6,742,665,693 % Increase/(Decrease) (8.83) Operational Results - Taka Operating Income 1,414,990, ,159,284 1,043,514,492 1,004,473, ,949,630 % Increase/(Decrease) (35.13) (37.23) (3.74) (5.63) Other Income 581,016, ,073, ,786, ,272, ,772,080 % Increase/(Decrease) (5.19) (10.21) Total Income 1,996,006,544 1,530,232,996 1,689,301,185 1,616,746,164 1,497,721,710 % Increase/(Decrease) (22.37) (23.34) (4.29) (7.36) Total Expenses 106,987, ,602, ,262, ,800, ,085,029 % Increase/(Decrease) (40.02) (1.53) Profit Before Taxation 1,889,019,017 1,387,630,915 1,531,038,960 1,366,998,838 1,256,504,847 % Increase/(Decrease) (21.05) (26.54) (10.71) (8.08) Profit After Taxation 1,194,083, ,478, ,592, ,743, ,986,440 % Increase/(Decrease) (20.00) (26.43) (9.60) (6.87) Earnings Per Share % Increase/(Decrease) (36.01) (26.42) (9.60) (6.87) 07

11 CDBL TEAM Managing Director & CEO Mohammed Habibus Samad, FCA, CTA Deputy Managing Director Shuvra Kanti Choudhury, MCom, FCA Application Support Md. Tohabin Huq, Mcom, PGD ( IT & Comp Sc) Md. Faruque Ahmed, Dip. in Comp Sc (Japan) Kazi Minhaz Uddin, BSc. Comp Engg Customer Support Services Dhaka Md. Muniruzzaman Rana, BSc. Comp Sc & Engg Shihab Bari, BSc. Comp Sc & Engg Md. Monirul Islam, BSc (CIS), MBA (MIS) Md. Tajul Islam, BCom. Dip. in Comp Sc Md. Sofeoul-Al-Mamun, BSc. ICT Md. Afsar Uddin, BCom, Dip. in Comp Sc Md. Sharif Ali Irteza, BSc. Comp Sc & Engg Al-Amin Hossain, MSc. Physics Kazi Jalal Uddin, BSc. Comp Sc & Engg Sylhet Prosunjit Biswas, BSc. Comp Sc & Engg Md. Abeed Omor, BSc. ETE Chittagong Mohammed Yeaqub Ali, BSc. ECE Manna Dey, BSc. Comp Sc & Engg, CCNA Rumen Sen, MSc. Mechanical Engg Traning Shafaet Ahmed Siddique, BSc. Comp Sc Finance & Accounts Md. Shahidul Islam, BBA (Acct), MBA (Fin), CMA (Part) Jayanta Biswnu Mondal, MCom, CA(CC), MBA Md. Golam Mostafa, BCom Ms. Rumana Rahman, BCom, CA (Inter) Ms. Shanaz Begum, MCom Ms. Nurjahan Begum, MSc Md. Imran Miah, BBS, MBA (Finance) Ms. Falguni Biswas Legal Affairs Syed Akhter Hossain, BA(Hons), MA (Public Administration) Almas Arefin, MCom Systems Operation G M Ahsanul Haque, MSc. Comp Sc Md. Moinul Haque, MSc. Comp Sc Raquibul Islam Chowdhury, MSc. Comp Sc K M Shaberul Islam, MBA (Finance), BSc. Comp Sc Quazi Ghulam Shakur, MSS (Econ) Saber Mahmud, BS (USA) Ms. Parvin Khan, MBA, Dip. in Comp Engg Network Administration A Hasib Rahman, MA, MCSE (Australia) Mashrur Sakib, BSc. Comp Sc, CCNA Md. Imam Hossain Sayem, BSc. Comp Sc (Russia) Shift Operations Mohammad Shaiful Alam, BSc. Comp Sc & Engg Shah Alam Masum, Dip. Electrical Engg Md. Muzaffar Mahmud, BSc. Comp Sc & Engg Md. Shahidul Islam, BSc. Comp Sc & Engg Minuddin Ahammed, BSc. Comp Sc Md. Mahfuzur Rahman, BSc. Comp Sc Md. Arif Hossain, BSc. Comp Sc Md. Saiful Islam, BSc. Comp Sc Md. Addul Latif Khandokar, BSc. Telecom Engineering Md. Habibur Rahman, Dip. In Comp Sc & Engg Abul Kalam Asad, BSc. EEE Touhidul Ahsan, Dip in Engineering Sajal Chandra Das, BSc. ETE Ijack Baroi, BSc. Comp Sc & Engg Md. Faizul Islam, Dip in Engineering Mahiuddin Masum, BSc. Comp Sc Afikur Rahman, Dip. In Comp Engg Administration & Maintenance Salahuddin Haidar, MBA (USA), MSCIT (Australia) Shafiqul Islam, BSc. Comp Sc & Engg Ms. Supria Florence Biswas, BSS Ms. Nasrin Haque Ms. Taslima Akhter, BA Md. Abdus Salam Md. Humayun Kabir Md. Moniruzzaman Sheikh 08

12 Fifteenth Annual General Meeting The 15 th Annual General Meeting of Central Depository Bangladesh Limited (CDBL) was held on Wednesday 25 th November 2015 at the Ball Room of Pan Pacific Sonargaon Hotel presided over by Mr. Sheikh Kabir Hossain, Chairman of the Company. Directors present (from right to left) Mr. Pradip Kumar Dutta, Dr. Muhammad Abdul Mazid, Mr. Syed Manzur Elahi, Mr. M H Samad, Mr. Sheikh Kabir Hossain, Mr. AKM Shamsuddin, Mr. Tapan Chowdhury, Mr. A K M Nurul Fazal Bulbul & Mr. Md. Fayekuzzaman while Auditor of the Company Mr. A F Nesaruddin, FCA and Deputy Managing Director & Company Secretary Mr. Shuvra Kanti Choudhury were at the left & right corner of the stage respectively. 09

13 Extra-Ordinary General Meeting An Extra-Ordinary General Meeting of Central Depository Bangladesh Limited (CDBL) was held on Monday 8 th February 2016 at the Samson H Chowdhury Center of Dhaka Club Limited presided over by Mr. Sheikh Kabir Hossain, Chairman of the Company. Directors present (from right to left) Mr. Pradip Kumar Dutta, Justice Siddiqur Rahman Miah, Mr. Azam Jahangir Chowdhury, Mr. Tapan Chowdhury, Mr. M H Samad, Mr. Sheikh Kabir Hossain, Mr. AKM Shamsuddin, Dr. Muhammad Abdul Mazid, Mr. A K M Nurul Fazal Bulbul, Mr. Sajjad Hussain and Mr. Shuvra Kanti Choudhury, Deputy Managing Director & Company Secretary of the Company. 10

14 CDBL Album 100 th Board Meeting of CDBL The 100 th Board Meeting of Central Depository Bangladesh Limited (CDBL) was held on Wednesday 25 th November 2015 presided over by Mr. Sheikh Kabir Hossain, Chairman of the Company. BSEC Chairman, Commissioners and Executive Directors on a visit to CDBL Dr. M Khairul Hossain, Chairman, Bangladesh Securities and Exchange Commission along with the Commissioners and Executive Directors of Bangladesh Securities and Exchange Commission (BSEC) visited CDBL office on Monday 9 th November 2015 and had a discussion meeting with the Board of Directors of CDBL. 11

15 CDBL Album BICM students on a study tour to CDBL Mr. Md. Saifur Rahman, Executive Director of Bangladesh Securities and Exchange Commission (BSEC) and Mr. Shuvra Kanti Choudhury, Deputy Managing Director of Central Depository Bangladesh Limited (CDBL) with the students of Bangladesh Institute of Capital Market (BICM) who visited CDBL on a study tour on Tuesday 10 th November They went through the whole operations of CDBL and module wise functionalities of Central Depository System (CDS) application software VeDAS (Versatile Engine for Depository Accounting System). Depository Participants from Nepal on a visit to CDBL Mr. M H Samad, Managing Director & CEO of Central Depository Bangladesh Limited (CDBL) with the team of Depository Participants (DPs) of Nepal who visited CDBL on Sunday 10 th April 2016 to be acquainted with the system and operations of Central Depository System in Bangladesh. 12

16 Directors Report The Board of Directors of Central Depository Bangladesh Limited (CDBL) is pleased to present the audited financial statements of the Company for the year ended 30 th June 2016, Auditors Report thereon along with a market overview relating to the Company s operations. Market Overview The stock market performance during the year ended 30 th June 2016 was lackluster and bumpy. Turnover at the exchanges suddenly dropped in September, October 2015 and then increased steadily in the next three months period from November 2015 to January Combined monthly turnover of the exchanges was around Tk.80 to Tk. 90 billion during rest of the year. The performance of the primary market was similar to last year as IPOs were oversubscribed which gave the opportunity to public investors to book some quick profits on their IPO subscriptions. Over the year Broad Index (DSEX) of Dhaka Stock Exchange (DSE) declined marginally by 1.64% from 4,583 on 30 th June 2015 to 4,508 on 30 th June Chittagong Stock Exchange (CSE) index was also down from 14,097 to 13,803, a loss of around 2.09% during the year. Turnover of DSE at Tk. 1,072 billion as against Tk. 1,124 billion in the previous year was down by 4.63%. CSE s turnover at Tk. 78 billion declined more severely compared to Tk. 96 billion in the previous year, down by 18.75%. Monthly combined turnover of both the exchanges during the year ended 30 th June 2016 is depicted hereunder:- Billion Jul - 15 Tk Tk Aug - 15 Tk Sep - 15 Tk Oct - 15 Tk Nov - 15 Taking the combined turnovers at both DSE & CSE during the year the top turnover performers list was headed by the premier pharmaceuticals company Square Pharmaceuticals Limited as tabulated below:- Tk Dec - 15 Tk Jan - 16 Tk Feb - 16 Tk Mar - 16 Tk Apr - 16 Tk May - 16 Tk Jun - 16 Company Square Pharmaceuticals Limited Bangladesh Export Import Company Limited United Power Generation & Distribution Company Limited Lafarge Surma Cement Limited Bangladesh Steel Re-Rolling Mills Limited Turnover Tk. Billion

17 Market Capitalization at the close of the year ended 30 th June 2016 stood at Tk. 3, billion (US$ bln) as against Tk.3, billion (US$ bln) at the end of 30 th June 2015 registering a loss of 1.90% during the year. Share price movements of the largest contributors to market capitalization declined during the year, with just one exception, as indicated below:- Company Market Cap. Tk. Billion Closing Price Tk. % Price Gain/ (Decline) Grameenphone Limited (22.75) Square Pharmaceuticals Limited British American Tobacco Bangladesh Company Limited (BATBC) , (11.33) Lafarge Surma Cement Limited (33.02) Investment Corporation of Bangladesh (10.19) Total number of listed securities at DSE stood at 338 at the end of the year made up of 292 companies, 36 mutual funds, 8 debentures and 2 corporate bonds excluding 221 Bangladesh Government Treasury Bonds. Number of shares, debentures, corporate bonds and mutual funds at DSE was 57,135 million and issued capital of these securities stood at Tk billion as at 30 th June Initial Public Offerings (IPO) by 11 entities tapped the market for around Tk. 8,583 million as tabulated below:- Subscription Date Opening Closing Company IPO Issue Tk. Million Times Over Subscribed KDS Accessories Limited (including a Premium of Tk per share) Simtex Industries Limited (including a Premium of Tk per share) Regent Textile Mills Limited (including a Premium of Tk per share) 1, Information Technology Consultants Limited SEML Lecture Equity Management Fund Vanguard AML BD Finance Mutual Fund One Dragon Sweater & Spinning Limited Doreen Power Generations and Systems Limited (including a Premium of Tk per share) Bangladesh National Insurance Company Limited The ACME Laboratories Limited (Offer Price per share for General Public was Tk ) 4, Evince Textiles Limited , Moneys raised through IPOs were around 33% less in comparison to the previous year when 16 companies raised around Tk. 12, million through Initial Public Offerings. 14

18 Central Depository System (CDS) Operations Depository Participants (DPs) Depository Participants (DPs) increased by 7 from 386 to 393 during the year ended 30 th June 2016 as detailed below:- Depository Participants (DPs) admitted to CDBL Brokers / Dealers Full Service DPs 30 th June th June Custodian DPs Stock Exchanges Total Investors Accounts Investors accounts in operation, as tabulated below, decreased by 40,267 during the year. Investors Accounts Individual Accounts Joint Accounts Company Accounts Omnibus Accounts Principal Accounts Clearing Accounts Total 30 th June ,989,443 1,196,173 8, ,195, th June ,938,406 1,206,696 9, ,155,585 Securities of 15 entities came into the CDS whilst Padma Cement Limited, ICB AMCL Islamic Mutual Fund, First ICB Mutual Fund and Second ICB Mutual Fund were delisted from the exchanges and went out of the CDS during the year. Out of the 357 companies 14 are in the OTC market whereas MTB Unit Fund, Rupali Life Insurance First Mutual Fund, UFS Popular Life Unit Fund, First ICB Unit Fund, Second ICB Unit Fund and Dhaka & Chittagong Stock Exchanges shares are not listed securities. Number of shares held in the CDS increased by 8% during the year by 4,073,672,191 taking the total from 50,874,302,471 as at 30 th June 2015 to 54,947,974,662 as at 30 th June Market value of the shares held in CDS as at 30 th June 2015 amounted to around Tk. 1, billion which increased to Tk. 1, billion as at 30 th June 2016 registering a gain of around 3%. Share trades settlement in the depository relating to combined stock exchange trades of DSE & CSE during the year were marginally lower in comparison to the previous year, as also the transaction value which went down by 5.70% while number of shares traded was higher in comparison to the previous year as tabled below:- No. of Shares in CDS Year Ended No. of Trades (Mln) No. of Shares Traded (Mln) Turnover Tk. (Bln) 54,947,974, th June ,447 1, ,874,302, th June ,257 1, % % Increase/(decrease) (0.90%) 7.49% (5.70%) 100% of the DSE & CSE combined daily trades during the year ended 30 th June 2016 was settled in the demat market segment. 15

19 Corporate Actions relating to bonus shares and rights issues decreased during the year. Consequently, credits to the BO accounts in the CDS on account of Corporate Actions were lower during the year as against previous year as depicted below:- Year Ended No. of Shares Total Bonus Rights Shares A/Cs credited Value Tk. Billion 30 th June ,436,750, ,462,466 2,658,213,404 2,203, th June ,989,967, ,233,029 3,462,509,764 3,109, % decrease (18.50) (42.28) (23.23) (29.13) (49.09) System Operations During the year a panel of Bangladesh University of Engineering and Technology (BUET) experts under the guidance of Professor Dr. M. Kaykobad was engaged by the Technical Committee of CDBL Board to carry out a review and assessment of CDBL s software, hardware and network system. As per BUET experts suggestion CDBL is now in the process of upgrading its core hardware system to latest HP Integrity Superdome2 servers, HP3PAR storage along with latest compatible backup system. It has also been decided that the current desktop based Application software of CDBL shall be converted to.net & Web based technologies to leverage the benefits of smooth operations of latest.net Framework which will enable Depository Participants to use the VeDAS (Versatile engine for Depository Accounting System) Application without installing it on their local client machine. Arising from the scrutiny by the BUET team and CDBL s commitment to enhance its cyber security, CDBL is now also in the process of upgrading its network Firewall System with new next-generation devices with intruder detection and prevention system. However, over the year the performance of VeDAS software application, HP Hardware systems operations and CDS data communication network were satisfactory. Personnel Workforce of the Company at the end of 30 th June 2016 was the same as at the end of the previous year at 65 of whom 45 were IT professionals. The 18 th Asia-Pacific Central Securities Depository Group (ACG) Cross-Training Seminar held at Ho Chi Minh City, Vietnam from 24 th to 27 th May 2016 was attended by 2 System Engineers and one System Analyst of the Company. The Company is continuing its ICT Management Training program of 6 months duration and outsourcing its security and cleaning services. Financial Results As a result of decline in turnover at the exchanges and decreased corporate actions of the listed companies the Operating Income of the Company decreased during the year by Tk. 56,524,367 i.e. around 6% from Tk. 1,004,473,997 in the previous year ended 30 th June 2015 to Tk. 947,949,630 in the year ended 30 th June The other income decreased by Tk.62,500,087 i.e. over 10% due to the steep decline in bank interest rates that took place. Consequently, the Net Profit of the Company decreased by 6.87% even though Operating Expenses decreased by 1.53% in comparison to the previous year ended 30 th June Earnings per Share (EPS) of the Company declined to Tk from Tk

20 The key figures relating to the financial results of the Company for the year ended 30 th June 2016 compared to the previous year are given below:- Particulars 30 th June 2016 Taka 30 th June 2015 Taka % increase / (decrease) Operating income 947,949,630 1,004,473,997 (5.63) Other income 549,772, ,272,167 (10.21) Operating expenses 175,085, ,800,019 (1.53) Net profit before income tax 1,256,504,847 1,366,998,838 (8.08) Income tax expenses 433,669, ,449,593 (9.36) Net profit after tax 823,986, ,743,266 (6.87) Paid up capital 2,000,000,000 2,000,000,000 - Earnings per share (EPS) (6.79) Cash Dividend: Notwithstanding the somewhat weaker financial results attained by the Company, the Board of Directors in its meeting held on 3 rd October 2016 decided to keep dividend at the same level as last year and accordingly recommend a cash dividend of 25% i.e. Tk. 2.5 per ordinary share of Tk. 10 each for the year ended 30 th June 2016 to the shareholders in the register of members as on 17 th October 2016 for consideration at the 16 th Annual General Meeting of the shareholders of the Company. Appropriations Net profit after taxation Un-appropriated profit brought forward Cash 25% paid for the year ended 30 th June 2015 Transferred to CDS Up-gradation Reserve Transferred to Headquarter Building Reserve Transferred to Investor Protection Fund Profit available for appropriation Dividend proposed for the year ended 30 th June 2016 Cash 25% Un-appropriated profit carried forward Taka 823,986, ,801,690 (500,000,000) (100,000,000) (200,000,000) (50,000,000) 545,788,130 (500,000,000) 45,788,130 Contribution to the National Exchequer During the year ended 30 th June 2016 the Company paid Tk. 392,049,341 as direct tax. Outlook The steep decline in bank interest rate and reduction in transaction charges as well as CDBL s portion of BO Account Maintenance Fee will have a significant adverse effect on the income of the Company. However, the overall business outlook for the Company in the coming year will be dependent on the daily turnover at the exchanges which will continue to be the single most important factor affecting the financial health of the Company. 17

21 Changes in Directorship During the year changes that occurred in the directorship of the Company were as follows: 13 th December 2015 Ms. Shamim Akhtar, General Manager, Sadharan Bima Corporation replaced Mr. Md. Rezaul Karim as nominee of Sadharan Bima Corporation. 4 th February 2016 Mr. Md. Iftikhar-uz-zaman, Managing Director, Investment Corporation of Bangladesh (ICB) replaced Mr. Md. Fayekuzzaman as nominee of ICB. Election of Directors Pursuant to Article 117 to 120 of the Company Mr. Tapan Chowdhury, Mr. Syed Manzur Elahi, Dr. Muhammad Abdul Mazid, Justice Siddiqur Rahman Miah and Mr. Salman F Rahman Directors of the Company will retire and being eligible, offer themselves for re-election. Appointment of Auditors The auditors of the Company, Hoda Vasi Chowdhury & Co, Chartered Accountants, retire as per Section 210 of the Companies Act 1994 and being eligible have offered themselves for re-appointment. Conclusion The Board of Directors is grateful for the assistance and support rendered to the Company by the Bangladesh Securities and Exchange Commission. The trust and confidence reposed on the Board and extended to the Company by the sponsor shareholders and the increasing number of users of the Company s Central Depository System (CDS) is most heartening and deeply appreciated as also the wholehearted support extended to CDBL by the Dhaka Stock Exchange Limited (DSE) and the Chittagong Stock Exchange Limited (CSE). The Board of Directors is also pleased to record its appreciation for the relentless efforts of the Company s staff at all levels in achieving good financial results in difficult circumstances during the year. The support extended by the Company s IT Solution provider, Tata Consultancy Services Limited and hardware maintenance team of HP Singapore and its local partner Flora Limited in keeping the CDS up and running is also duly acknowledged and appreciated by the Board. For and on behalf of the Board of Directors Sheikh Kabir Hossain Chairman 18

22 Hoda Vasi Chowdhury & Co Chartered Accountants INDEPENDENT AUDITOR S REPORT To the shareholders of Central Depository Bangladesh Limited We have audited the accompanying financial statements of Central Depository Bangladesh Limited, which comprise the statement of financial position as at 30 June 2016, the related statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other relevant explanatory notes thereon. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Bangladesh Financial Reporting Standards (BFRSs), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud and error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Bangladesh Standards on Auditing (BSAs). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risks assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as at 30 June 2016 and its financial performance and its cash flows for the year then ended in accordance with Bangladesh Financial Reporting Standards (BFRSs) and comply with the Companies Act, 1994 and other applicable laws and regulations. National Office: Motijheel Office: Chittagong Office: BTMC Bhaban (7 th & 8 th Floor), 7-9 Kawran Bazar Commercial Area, Dhaka , Bangladesh Ispahani Building (3 rd Floor), Motijheel Commercial Area, Dhaka , Bangladesh Delwar Bhaban (4 th Floor), 104 Agrabad Commercial Area, Chittagong , Bangladesh 19

23 Hoda Vasi Chowdhury & Co We also report that: a) b) c) d) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit and made due verification thereof; in our opinion, proper books of account as required by law have been kept by the Company so far as it appeared from our examination of those books; the Company s statement of financial position and statement of profit or loss and other comprehensive income together with the annexed notes 1 to 24 dealt with by the report are in agreement with the books of account; and the expenditures incurred and payments made were for the purposes of the Company s affairs. Emphasis of matter Without qualifying our report, we draw attention to note 2.9(c) to the financial statements which states that as per the Bangladesh Labour (Amendment) Act, 2013, the Company is required to contribute 5% of its net profit before tax to the Workers Profit Participation and Welfare Fund and make such payment within maximum nine months from the completion of a year. But the Company is yet to disburse the payment of WPPF amounting to Taka 71,947,307 for the financial year 2015, which is an apparent non-compliance with the Labour Act. Dhaka, 04 October 2016 Chartered Accountants 20

24 Central Depository Bangladesh Limited Statement of Financial Position as at 30 June 2016 These financial statements should be read in conjunction with annexed notes Hoda Vasi Chowdhury & Co Notes Taka Taka ASSETS: Non-current assets: 725,318, ,866,301 Property, plant and equipment-at cost less accumulated depreciation 4 110,491, ,973,962 Investment in bonds - at cost 5 607,442, ,658,202 Deferred tax assets 6 7,384,974 6,234,137 Current assets: 6,017,346,909 5,453,901,576 Accounts receivable 7 99,762, ,899,740 Interest receivable 8 210,028, ,962,241 Advances and deposits 9 4,740,200 14,492,587 Loans 10 5,642,102 5,007,741 Cash and cash equivalents 11 5,697,173,363 5,140,539,267 TOTAL ASSETS 6,742,665,693 6,411,767,877 SHAREHOLDERS' EQUITY AND LIABILITIES: Shareholders' equity: 6,195,788,130 5,871,801,690 Share capital 12 2,000,000,000 2,000,000,000 Retained earnings 545,788, ,801,690 Reserves: CDS upgradation 600,000, ,000,000 Headquarter building 2,850,000,000 2,650,000,000 Investor protection 200,000, ,000,000 Non-current liabilities: Security deposits ,050, ,950,000 Current liabilities: 401,827, ,016,187 Accounts payable and other liabilities ,457, ,468,532 Unearned revenue 15,045,139 13,842,278 Provision for income tax - net off advance tax ,325,281 64,705,377 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 6,742,665,693 6,411,767,877 Chairman Director Deputy Managing Director & CFO Managing Director & CEO Auditor s Report to the Shareholders See annexed report of date Dhaka, 04 October Chartered Accountants

25 Notes Taka Taka Operating income ,949,630 1,004,473,997 Operating and administrative expenses 17 (175,085,029) (177,800,019) Operating profit 772,864, ,673,978 Other income ,772, ,272,167 Net profit before allocation to workers' profit participation fund 1,322,636,681 1,438,946,145 Workers' profit participation fund (66,131,834) (71,947,307) Net profit before income tax 1,256,504,847 1,366,998,838 Current tax expense 15 (433,669,245) (478,449,593) Deferred tax income /(expense) 6 1,150,837 (3,805,979) Net profit after tax for the year 823,986, ,743,266 Accumulated profit brought forward from previous year 571,801, ,058,424 Profit available for appropriation 1,395,788,130 1,471,801,690 Dividend paid in cash 19 (500,000,000) (500,000,000) Transferred to reserves Central Depository Bangladesh Limited Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2016 Hoda Vasi Chowdhury & Co CDS upgradation (100,000,000) (100,000,000) Headquarter building (200,000,000) (250,000,000) Investor protection (50,000,000) (50,000,000) (350,000,000) (400,000,000) Accumulated profit transferred to retained earnings 545,788, ,801,690 Earnings per share These financial statements should be read in conjunction with annexed notes Chairman Director Deputy Managing Director & CFO Managing Director & CEO Auditor s Report to the Shareholders See annexed report of date Dhaka, 04 October 2016 Chartered Accountants 22

26 Central Depository Bangladesh Limited Statement of Changes in Equity For the year ended 30 June 2016 Hoda Vasi Chowdhury & Co Particulars Share capital Retained earnings Reserves Total Taka Taka Taka Taka Balance as on 01 July ,000,000, ,058,424 2,900,000,000 5,487,058,424 Net profit for the year - 884,743, ,743,266 Cash dividend paid for (500,000,000) - (500,000,000) Reserves: CDS upgradation - (100,000,000) 100,000,000 - Headquarter building - (250,000,000) 250,000,000 - Investor protection - (50,000,000) 50,000,000 - Balance as at 30 June ,000,000, ,801,690 3,300,000,000 5,871,801,690 Net profit for the year - 823,986, ,986,440 Cash dividend paid for (500,000,000) - (500,000,000) Reserves: CDS upgradation - (100,000,000) 100,000,000 - Headquarter building - (200,000,000) 200,000,000 - Investor protection - (50,000,000) 50,000,000 - Balance as at 30 June ,000,000, ,788,130 3,650,000,000 6,195,788,130 Chairman Director Deputy Managing Director & CFO Managing Director & CEO 23

27 Central Depository Bangladesh Limited Statement of Cash Flows For the year ended 30 June 2016 Hoda Vasi Chowdhury & Co Taka Taka A. Cash flows from operating activities Cash receipts from customers and others 976,377,271 1,023,378,317 Cash paid to suppliers and employees for operating and administrative expenses (150,955,157) (188,063,798) Cash paid/receipts against BO A/C maintenance fee collected on behalf of BSEC and Government (118,850,000) (203,825,500) Cash receipts against security deposits 8,100,000 9,900,000 Cash receipts/paid against deposits and pre-payments 9,752,387 2,998,350 Cash receipts/paid against advance and loans to employees (634,361) 2,840,388 Cash generated from operations 723,790, ,227,757 Income tax paid (392,049,341) (503,933,980) Net cash generated by operating activities 331,740, ,293,777 B. Cash flows from investing activities Interest income 506,705, ,379,555 Acquisition of property, plant and equipment (4,027,868) (11,463,200) Investment in bonds - (70,687,537) Divestment of bonds 222,215, ,658,660 Net cash generated by investing activities 724,893, ,887,478 C. Cash flows from financing activities Dividend paid (500,000,000) (500,000,000) Net cash used in financing activities (500,000,000) (500,000,000) D. Net increase in cash and cash equivalents (A+B+C) 556,634, ,181,255 E. Cash and cash equivalents at beginning of the year 5,140,539,267 4,813,358,012 F. Cash and cash equivalents at end of the year 5,697,173,363 5,140,539,267 Chairman Director Deputy Managing Director & CFO Managing Director & CEO 24

28 Central Depository Bangladesh Limited Notes to the Financial Statements For the year ended 30 June 2016 Hoda Vasi Chowdhury & Co 1. Background and objective of the Company Central Depository Bangladesh Limited (hereinafter referred to as CDBL or the Company ) was incorporated on 20 August 2000 in Bangladesh as a public limited company for running a central securities depository operation, first of its kind in Bangladesh. The Company was sponsored by the country s Nationalised Commercial Banks (NCBs), Investment Corporation of Bangladesh (ICB), Private Commercial Banks (PCBs), Foreign Banks, Merchant Banks, Publicly Listed Companies, Insurance Companies, Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited with the collaboration of the Asian Development Bank (ADB). The Company obtained registration from the Bangladesh Securities & Exchange Commission (BSEC) on 11 September 2001 under Depositories Regulations 2000 and subsequently obtained business commencement certificate on 23 December 2003 from the BSEC. However, the Company commenced depository operations of Government securities from 20 October 2003 and that of listed securities from 24 January The main objective of the Company is to assist listed companies in handling of scripless transfer of ownership of shares, debentures, mutual funds and corporate bonds. 2. Significant accounting policies 2.1 Basis of preparation and presentation of financial statements 2.2 These financial statements have been prepared in compliance with Bangladesh Accounting Standards (BAS), Bangladesh Financial Reporting Standards (BFRS), the Companies Act, 1994, the Depositories Act, 1999, the Depositories Regulations, 2000 and the Depository (User) Regulations, 2003 and other applicable laws. Application of Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS) The applicable BASs are as follows: BAS-1 BAS-7 BAS-8 BAS-10 BAS-12 BAS-16 BAS-18 BAS-19 BAS-21 BAS-32 BAS-33 BAS-36 BAS-37 BAS-38 BAS-39 Presentation of Financial Statements Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Income Taxes Property, Plant and Equipment Revenue Employee Benefits The Effects of Changes in Foreign Exchange Rates Financial Instruments: Presentation Earnings Per Share Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Financial Instruments: Recognition and Measurement The applicable BFRSs are as follows: 25 BFRS-7 Financial Instruments: Disclosures

29 2.3 Use of estimates and judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 2.4 Property, plant and equipment (PPE) and depreciation Hoda Vasi Chowdhury & Co a) Acquisition of Property, plant and equipment Operating fixed assets are capitalised at cost inclusive of the cost of installation and erection. These are stated at cost less accumulated depreciation. Expenditures relating to site preparation and office renovation has been capitalised whilst incidental expenses in relation to repairs and maintenance, renewals, and systems maintenance and fine-tuning are charged to the statement of profit or loss and other comprehensive income. b) Depreciation of PPE The Company uses straight line depreciation method. Depreciation is charged when the assets are available for use, unlike previous years where depreciation was charged for full year irrespective of the date of acquisition. Had it been charged like previous years, the amount of depreciation charged during the year would have increased by Taka 533,030 and profit for the year would have decreased to that extent. 2.5 Provision The Company recognises provisions when it has a legal or constructive obligation resulting from past events, the resolution of which would result in outflow of resources embodying economic benefits from the Company. 2.6 Foreign currency transactions Foreign currency transactions are converted into Bangladesh Taka at the rate of exchange prevailing on the transaction dates. 2.7 Taxation a) Current tax Current income tax is recognised on the basis of Company s computation based on the best estimated assessable profit for the 35% pursuant to provisions of Income Tax Ordinance The tax rate for the year is applied on the basis of Finance Act b) Deferred tax Deferred tax is calculated using the carrying amount and tax base of assets and liabilities. Deferred tax arises due to temporary difference deductible or taxable for the events or transactions recognised in the statement of comprehensive income. A temporary difference is the difference between the tax base of an asset or liability and its carrying amount / reported amount in the statement of financial position. Deferred tax asset or liability is the amount of income tax recoverable or payable in future periods recognised in the current period. The deferred tax asset / income or liability / expense does not create a legal recoverability / liability to and from the income tax authority. The resulting impact of deferred tax assets / liabilities is included in the statement of Profit or loss and other comprehensive income. 26

30 2.8 Revenue recognition Consistent with previous practice, the income of the Company is recognised based on the services rendered and invoices raised there against on accrual basis. 2.9 Employee benefits a) Provident fund The Company operates a recognised provident fund scheme with equal contribution by the employees and the 10% on monthly basic salary. b) Gratuity The gratuity fund is maintained in accordance with the rules of gratuity fund which is approved by the National Board of Revenue (NBR). Employees having five years of services with the Company are eligible to get one month s last drawn pay for each completed year of service. c) Workers profit participation and welfare fund The Company recognises a provision for workers profit participation and welfare 5% of net profit before tax as per the Bangladesh Labour (Amendment) Act, It is further required by the Labour Act that such payment is made within maximum nine months from the completion of a year. However, the Company is yet to disburse the WPPF amount of Taka 71,947,307 for the financial year 2015, once the matter is cleared from the legal consultants and the concerned authorities for which the matter has already been taken up Earnings per share (EPS) a) Basic Earnings Per Share Earnings Per Share (EPS) has been calculated in accordance with the BAS-33: Earnings Per Share. Computation of basic Earnings Per Share has been done by dividing the earnings attributable to the number of ordinary shares held by the shareholders during the year. b) Diluted Earnings Per Share No diluted earnings per share is required to be calculated during the period as there is no scope for dilution under review Events after the reporting period Events after the reporting period that provide additional information about the Company s position at the date of statement of financial position are reflected in the financial statements. Events after the reporting period that are not adjusting events are disclosed when material as per BAS-10: Events after the Reporting Period Reporting period The reporting period of the Company covers one year from 1 July to 30 June consistently. Hoda Vasi Chowdhury & Co 2.13 Reserves The Company maintains reserves for Central Depository System (CDS) upgradation, headquarter building and investor protection. CDS upgradation reserve was created for future upgradation and modernization of central depository system to ensure uninterrupted services to the clients. Headquarter building reserve was created to build a premise on the Company s own land in future. Investor protection reserve was created to protect the Company from any future risks of loss arising from a genuine and bonafide claim made by any client. 3. General (i) Figures appearing in these financial statements have been rounded off to the nearest Taka; and (ii) Previous year s figures have been rearranged, wherever considered necessary, to conform to current year s presentation. 27

31 Hoda Vasi Chowdhury & Co 4. Property, plant and equipment-at cost less accumulated depreciation Figures in Taka Particulars Balance as on 01 July 2015 C O S T Additions Balance as at during 30 June 2016 the year Rate (%) D E P R E C I A T I O N Balance as on Charged 01 July 2015 during the year Balance as at 30 June 2016 Written down value as at 30 June 2016 Central Depository System (CDS): Software 142,623, ,623, ,167,684 11,485, ,652,884 22,970,499 Hardware 193,793, ,793, ,301,394 2,464, ,765,394 7,027,680 Network equipment,lan and WAN 25,078,227 1,041,180 26,119, ,077,430 86,765 25,164, ,212 Sub-total 361,494,684 1,041, ,535, ,546,508 14,035, ,582,473 30,953,391 Computers and accessories 6,779, ,036 7,652, ,437, ,370 6,635,723 1,016,546 Office and electrical equipment 5,248,532 1,189,440 6,437, ,922, ,247 5,128,042 1,309,930 Furniture and fixtures 4,435,724-4,435, ,299,654 32,369 4,332, ,701 Air conditioners 3,488, ,750 4,165, ,196, ,147 3,329, ,807 Site preparation and office renovation 2,710, ,462 2,956, ,709,740 21,330 2,731, ,532 Power generator 3,526,895-3,526, ,526,700-3,526, Auto sensor fire alarm 2,060,260-2,060, ,060,064-2,060, Motor vehicles 13,203,000-13,203, ,432, ,000 12,317, ,104 Land 75,160,000-75,160, ,160,000 Sub-total 116,611,884 2,986, ,598,572 38,586,098 1,474,463 40,060,561 79,538,011 Grand total as at 30 June ,106,568 4,027, ,134, ,132,606 15,510, ,643, ,491,402 Grand total as at 30 June ,643,368 11,463, ,106, ,128,815 21,003, ,132, ,973,962 28

32 Hoda Vasi Chowdhury & Co Taka Taka 5. Investment in bonds - at cost Mutual Trust Bank Limited 52,500,000 70,000,000 Dhaka Bank Limited 175,000, ,000,000 National Bank Limited 153,600, ,000,000 Trust Bank Limited 120,000, ,000,000 United Commercial Bank Limited 50,000,000 50,000,000 IDLC Finance Limited 11,584,446 36,970,665 LankaBangla Finance Limited 44,757,962 70,687, ,442, ,658, Deferred tax assets Deferred tax has been calculated in accordance with the provision of BAS-12: "Income Taxes" based on temporary differences arising due to differences in the carrying amount of the assets or liabilities and their tax base which resulted in a deferred tax asset of Taka 7,384,974 arrived as follows: Tax base value of fixed assets except land 46,106,865 59,687,746 Less: Carrying amount of fixed assets except land 35,331,402 46,813,962 Deductible temporary difference 10,775,463 12,873,784 Provision for gratuity fund 3,813,550 - Provision for leave encashment 3,233,895 1,661,019 Provision for bad debts 3,277,017 3,277,017 Total deductible temporary differences 21,099,925 17,811,820 Applicable tax rate 35.00% 35.00% Deferred tax assets at end of the year 7,384,974 6,234,137 Deferred tax asset in previous year 6,234,137 10,040,116 Deferred tax income for the year 1,150,837 (3,805,979) 7,384,974 6,234,137 29

33 Hoda Vasi Chowdhury & Co Taka Taka 7. Accounts receivable Participants 77,000, ,609,530 Issuers 26,038,513 23,567, ,039, ,176,757 Less: Provision for bad debts 3,277,017 3,277,017 99,762, ,899, Interest receivable FDR/TDR interest receivables 199,435, ,798,756 Bond interest receivables 10,571,190 12,140,727 Bank interest receivables 22,230 22, ,028, ,962, Advances and deposits Advances CMC Limited - 10,027,967 Deposits Bangladesh Development Bank Limited - office rent 2,120,850 1,845,270 RAJUK - Uttara Industrial Plot 2,500,000 2,500,000 Bangladesh General Insurance Company Limited - office rent for DRC at BGIC Tower 119, ,350 4,740,200 4,464,620 4,740,200 14,492, Loans 5,642,102 5,007,741 The loan amounting to Taka 5,642,102 to the employees represent interest free loans granted on different personal grounds which are being recovered from monthly salaries. 11.Cash and cash equivalents Cash in hand 178, ,357 Cash at bank Current account with Standard Chartered Bank 952,835 4,450,507 Short term deposits with: Sonali Bank Limited, Dhaka 1,111,387 1,071,048 Standard Chartered Bank 13,932,561 29,838,820 Bangladesh Development Bank Limited, Dhaka 14,624,417 17,803,020 Southeast Bank Limited, Dhaka 91,323,609 62,727, ,991, ,440,792 Term deposits 5,575,050,000 5,024,439,611 5,697,173,363 5,140,539,267 30

34 12. Share capital 12.1 Authorised capital Taka Taka 300,000,000 ordinary shares of Taka 10 each 3,000,000,000 2,000,000, Issued, subscribed and paid up capital Hoda Vasi Chowdhury & Co 200,000,000 ordinary shares of Taka 10 each 2,000,000,000 2,000,000, Composition of shareholders Name of Shareholders No. of Shares Nationalized and specialized banks 36,956, ,562, ,562,950 Private commercial and specialized banks 59,741, ,411, ,411,030 Foreign commercial banks 19,569, ,694, ,694,440 Insurance companies 14,810, ,107, ,107,780 Publicly listed companies 19,777, ,777, ,777,880 NBFIs and merchant banks 7,084,495 70,844,950 70,844,950 Dhaka Stock Exchange Limited (DSE) 13,612, ,125, ,125,550 Chittagong Stock Exchange Limited (CSE) 13,612, ,125, ,125,550 Investment Corporation of Bangladesh (ICB) 6,112,555 61,125,550 61,125,550 Sadharan Bima Corporation 6,112,555 61,125,550 61,125,550 Private limited companies 2,174,188 21,741,880 21,741,880 Other individuals 435,689 4,356,890 4,356, Classification of shares by holding: 200,000,000 2,000,000,000 2,000,000,000 Slabs by number No. of holders No. of shares Holding % Less than 25, From 25,000 to 100, , From 100,001 to 1,000, ,969, Above 1,000, ,970, ,000, The authorised share capital of the Company has been increased from Taka 2,000,000,000 to Taka 3,000,000,000 divided into 300,000,000 ordinary shares of Taka 10, by the shareholders at an Extra-Ordinary General Meeting (EGM) held on 08 February

35 Hoda Vasi Chowdhury & Co Taka Taka 13. Security deposits Participants 49,700,000 47,700,000 Issuers 94,800,000 88,700,000 Direct account holders 550, , ,050, ,950, Accounts payable and other liabilities Accounts payable Chittagong Stock Exchange Limited - network sharing 552, ,674 Other liabilities Bangladesh Securities & Exchange Commission for annual account maintenance fee (note-14.1) 26,423,750 50,193,750 Government of Bangladesh for annual account maintenance fee (note-14.2) 103,737, ,817,600 DPs and Issuers 2,316, ,407 Sundry creditors- Telephone and other bills 977,977 93,554 Salary and allowances 3,233,895 1,661,019 Workers' profit participation and welfare fund 138,079,141 71,947,307 Contribution to provident fund 583,150 - Contribution to gratuity fund (note ) 3,813,550 - Hoda Vasi Chowdhury & Co - Audit fee including VAT 529, ,000 Payable to employees 209, , ,904, ,829, ,457, ,468, The amount represents Bangladesh Securities & Exchange Commission s portion of annual account maintenance fee (Taka 50 per BO account) collected by the Company The amount represents Government of Bangladesh s portion of annual account maintenance fee (Taka 200 per BO account) collected by the Company Provision for contribution to gratuity fund have been made taking into account of accumulated profit on the fund upto 31 December

36 Hoda Vasi Chowdhury & Co Taka Taka 15. Provision for income tax - net off advance tax Opening balance 64,705,377 90,189,764 Add: Provision made for current year 433,669, ,449, ,374, ,639,357 Less: Advance and payments made during the year Tax deducted at source on interest on short term deposits 2,790,911 3,246,758 Tax deducted at source on interest on fixed term deposits 38,781,563 48,378,985 Tax deducted at source on interest on bonds 6,278,311 8,873,877 Tax deducted by the depository participants and Issuers on bills 2,311,173 1,828,615 Advance income tax paid during the year 330,150, ,150,000 Income tax paid for the year 11,737,383 41,455, ,049, ,933, ,325,281 64,705, Operating income Dematerialization of securities 7,580,037 1,142,082 Settlement of securities transactions 377,672, ,826,273 Annual accounts maintenance 459,873, ,799,050 Issuers book entry demat register maintenance 29,997,888 23,129,082 Documentations 72,500 56,374 CDS connections 4,752,000 3,495,317 Rematerialization of securities 184,628 44,192 Corporate actions 34,380,313 54,208,380 Pledging and unpledging of securities 9,640,060 7,491,911 Suspensions and revocations 70,510 63,492 Fresh issues (IPO) 9,474,075 17,218,602 Transfers and transmissions 13,299,483 19,944,669 Radio link connections 846, ,907 Freeze 29,600 32,668 Internet balance inquiry 67, ,100 Confiscations 8,730 38,398 SMS alert service 200 5, ,949,630 1,004,473,997 33

37 17. Operating and administrative expenses Hoda Vasi Chowdhury & Co Taka Taka Salaries and allowances 72,053,020 65,558,653 Office rent 11,598,757 9,383,480 Electricity and water 4,901,154 4,721,600 Depository system maintenance 44,308,032 54,764,816 Insurance 608, ,658 Motor car maintenance 966,460 1,083,809 Advertisement expenses 168, ,492 Entertainment expenses 171, ,495 Printing, postage and stationery 686,150 1,015,446 WAN, telephone and internet 4,150,919 3,786,881 Traveling and conveyance 633, ,735 License fees and subscriptions 178, ,575 Legal and professional fees 3,141,308 28,144 Training and development 1,648,849 4,289,642 Marketing and capacity building 379, ,987 Refectory expenses 355, ,987 Security services 1,816,417 1,791,905 Repairs and maintenance 1,073, ,249 Office cleaning 127, ,206 Bank charges and excise duty 2,000,973 1,078,879 Audit fee including VAT 1,000, ,000 Meetings and participant conferences 1,400, ,900 Directors fee 3,300,000 1,817,000 Other expenses 84, ,291 Depreciation (note-4) 15,510,428 21,003,791 Corporate Social Responsibility 2,822,249 2,757, ,085, ,800, Other income Interest income on FDR 432,417, ,335,261 Interest income on Bond 89,821, ,741,142 Interest income on STD accounts: Sonali Bank Limited 44,293 46,469 Bangladesh Development Bank Limited 750,241 1,023,169 Southeast Bank Limited 26,499,674 30,709,199 Standard Chartered Bank 239, ,838 27,533,460 32,464,675 Bad debt realized - 21,731, ,772, ,272, Dividend Cash dividend ,000, ,000,000 During the year, the Company paid cash 25% for the year

38 Hoda Vasi Chowdhury & Co Taka Taka 20. Proposed dividend The Directors in their meeting held on 03 October 2016 have proposed a cash 25% i. e. Taka 2.5 per ordinary share of Taka 10 each. The financial statements for the year ended 30 June 2016 do not include the effects of the above cash dividend which will be accounted for in the period in which it is paid. 21. Earnings per share (EPS) 21.1 Basic earnings per share Net profit after tax for the year 823,986, ,743,266 Number of ordinary shares 200,000, ,000,000 Basic earnings per share Payments / perquisites to Directors Directors attending the Board Meetings were paid Taka 20,000 per meeting. The Managing Director & CEO received an aggregated amount of Taka 12,060,000 (2015 : Taka 13,588,904) as emoluments during the financial year. 23. Contingent liabilities and commitments 23.1 Contingent liability Nil Nil 23.2 Claims against the Company not acknowledged as debts Nil Nil 23.3 Capital expenditure commitments: i) Contracted but not provided for in these accounts Nil Nil ii) Approved by the Board but not contracted for 259,760,285 Nil 24. Particular of employees The number of employees engaged during the year and drawing salary: Above Taka 3,000 per month Below Taka 3,000 per month Nil Nil Chairman Director Deputy Managing Director & CFO Managing Director & CEO 35

39